REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, Acting City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Bill Krill, Real Estate and Project Manager
Subject:
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Approve and authorize the execution of a Site License Agreement with Verizon for an Existing Cell Site at Talbert Park.
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Statement of Issue:
The City Council is asked to approve and authorize execution an updated Site License Agreement between the City of Huntington Beach and Los Angeles SMSA, doing business as Verizon, for the continued operation of an existing cell site at Talbert Park.
The previous License Agreement for the cellular site at 19242 Magnolia has expired. The prior agreement was a three-party agreement between the City, Verizon, and Southern California Edison (SCE). The proposed agreement, reviewed and approved by the City Attorney’s Office, will allow the City to continue collecting the license fees while removing SCE as a party to the Agreement.
Financial Impact:
The proposed agreement will increase the monthly license fee from $1,471.36 to $3,500 representing a 138% revenue increase. Additionally, the City will receive a one-time payment of $20,000 upon execution. All revenue will be deposited into General Fund Account No. 10000100.45110. The estimated lifetime value of the agreement, including escalations and extensions is approximately $1,769,125.
Recommended Action:
recommendation
Approve and authorize the Mayor and City Clerk to execute the “Site License Agreement for Installation and Use of a Communications Antenna Facility and Supporting Equipment between the City of Huntington Beach and Los Angeles SMSA Limited Partnership, DBA Verizon.”
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Alternative Action(s):
Do not approve the recommended action and direct staff accordingly.
Analysis:
The City of Huntington Beach owns the property at 19242 Magnolia Street (APN 153-432-32), known as Talbert Park. Southern California Edison holds an easement for transmission lines over the park site. In 2002, the City, Verizon, and SCE entered into a three-party Site License Agreement that allowed Verizon to install cellular equipment on City-owned land and antennas on SCE’s transmission towers.
In October 2022, SCE informed the City that it no longer wished to remain a party to the agreement. As a result, Verizon was required to negotiate separate agreements with both the City and SCE to maintain its existing cellular installation.
The previous License Agreement expired on November 18, 2023. Negotiations for the updated agreement began prior to the expiration but were prolonged due to the complex nature of the historical agreement and the below-market rates of the previous agreement. After approximately two years of negotiations, City staff successfully secured favorable terms for the City.
Key terms of the proposed agreement include:
• License Area: Verizon will retain access to the existing licensed area on City-owned property. No additional space will be granted. Verizon must secure a separate agreement with SCE to maintain its attachments to the transmission towers.
• Term: An initial 5-year term retroactive to November 18, 2023, running through November 17, 2028. Verizon will have the option to extend the agreement for four additional 5-year terms, with automatic renewal unless either party provides written notice of intent not to renew. The agreement could extend through November 17, 2048, unless terminated earlier or amended.
• License Fee: The monthly license fee will increase to $3,500.00, with an annual 4% escalation. This exceeds the market standard escalation of 3%.
• One-Time Payment: Verizon will pay a $20,000 lump sum upon execution of the agreement.
• Estimated Revenue: The agreement is projected to generate $1,769,128.15 over its lifetime, including escalations and extensions.
By approving this agreement, the City ensures ongoing revenue from this site at current market rates, while maintaining control over the licensed area.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Site License Agreement
2. PowerPoint Presentation
3. Certificate of Insurance